Strange options pricing

[teun]

I just looked at Yahoo and noticed that the AMD call option series with expiration date May have a lower price than the same calls which expire in April.

April:

http://finance.yahoo.com/q/os?s=AMD&m=2007-04

May:

http://finance.yahoo.com/q/os?s=AMD&m=2007-05

Also note the different naming. Does anybody understand this?

 

[xyannix]

They are non standard options. They only equal 95 Shares instead of the normal 100 shares.

They could be the result of a merger or spin off.

The normal May options for AMD have not started trading yet.

 

[teun]

Thanks.

I assume there must be more reasons because the prices are very different (much more than a 5% difference in underlying shares could explain...).

 

[xyannix]

Are you looking at the Bid / Ask or at the Last? The last is probably old because it is thinly traded.

 

[teun]

I'm only looking at the bid-ask.

 

[MyOwnBoss]

If you see something suspect with options, check the contract adjustments section of the OCC website at:

http://www.theocc.com/market/infomemos/info_memos_form.jsp

You can search by the underlying equity and find any adjustments (adjusted options=contract deliverables other than 100 shares of underlying) that the contracts have undergone. This is also handy because it will explain how adjusted options are priced as well.

Good luck,

MyOwnBoss

 

[FullyArticulate]

QZA series options (the May expiration ones) are for 95 shares of AMD and $19.24 cash.

This is due to the ATYT merger.